Collaboration between Switzerland and the UAE is thriving on numerous fronts. Trade, tourism, defence and close-knit economic outlooks are just some of the areas pushing the relationship forward.
And the traditionally healthy diplomatic relations between the UAE and Switzerland have in recent years been further enhanced by an increasing frequency of political visits. The progressive relationship the countries enjoy is reflected in the double-digit growth of two-way trade, which has rendered the UAE the Swiss’ most important trading partner in the Middle East.
Watching it grow
Swiss exports to the UAE increased 14 per cent between 2011 and 2012, to reach CHF3.43 billion (Dh12.5 billion), while imports from the UAE totalled CHF551 million, which represent an 11 per cent increase from annual trade the previous year, according to UAE Ministry of Foreign Affairs data. Of these, watches are the most glamorous import to the UAE, with the UAE ranked among the top ten countries importing Swiss watches, according to the Federation of the Swiss Watch Industry.
But it’s not all watches, chocolate and pharmaceutical products that draw the two countries together. In matters of defence — a key facet of the Middle Eastern socio-political make-up right now — Swiss Army Chief Lt. Gen André Blattmann made it clear earlier this year that the Swiss are impressed with the way the UAE has maintained a stable political and social environment in a fracturing Middle East.
Speaking at the biennial International Defence Exhibition (Idex) in Abu Dhabi, Blattman underlined the link between the UAE Armed Forces and the Swiss Ministry of Defence: “The UAE Armed Forces are contributing to stability in a vitally important region,” he told reporters at the Idex daily show bulletin.
“And [the UAE is] a very demanding customer concerning defence equipment. Thus, it is a particular honour for Switzerland that the UAE Air Force has chosen the Pilatus PC-21 training system; it is the same that we are using in Switzerland.
“Furthermore, there are frequent visits at the level of Defence Minister, Chief of the Armed Forces or Commander of the Air Force. We appreciate these contacts and are looking forward to a long and mutually beneficial cooperation.”
Thirty Swiss defence firms were represented at Idex in 2013 — up from 18 in 2011.
Green technology
Swiss companies in the UAE — which now number more than 300, according to the UAE news agency, WAM — are moving forward and prospering apace. Perhaps the epitome of Swiss-UAE collaboration within the country is Farnek Avireal, the Swiss-owned facilities management company, which has had an influential hand in developing the UAE’s green push in the hospitality and real estate sectors.
As well as introducing the Green Globe Certificate (GGC) as the sustainable benchmark for buildings in the UAE, Farnek recently unveiled its new sustainably minded 2,500-square-metre office building in Al Quoz, where up to 1,000 employees are housed. Ambassador Andrea Reichlin was there to oversee the launch and symbolise the importance the Swiss embassy places on sustainably developing the UAE’s future.
In a statement released to the press Ambassador Reichlin said: “Naturally as a government institution it belongs to our core business to support Swiss operators in the UAE. However, it is particularly pleasing to visit a successful company, especially one which is explicitly committed and has such an enviable reputation for sustainability.
“Furthermore it showcases that the private and public sector are not only joining efforts for sustainable energy solutions in Switzerland but that companies like Farnek can point with Swiss acquired expertise [in the UAE].”
Industrial zones
Outside the traditional centres of Abu Dhabi and Dubai, the Ras Al Khaimah Investment Authority has done much to further trade relations between the UAE and Switzerland. >
The Rak government entity responsible for attracting investments to its free and industrial zones co-sponsored the Forum for Swiss Foreign Trade and Investment 2012 organised by OSEC in Zürich Exhibition Centre, Switzerland in March last year.
More than 60 companies from Switzerland have commenced operations in Ras Al Khaimah including Franke, EPFL Middle East, Swiss International Chocolates and Falcon Technologies. And with the ratification of the Swiss-UAE treaty for the avoidance of double taxation confirmed by the Swiss at the end of last year, more business is likely to spawn from the initiative.
Trade agreements
The Swiss government confirmed on November 8, 2012, that the double taxation agreement signed with the UAE came into effect on October 21, 2012. Withholding tax provisions in respect of dividends, interest and royalties are effective retrospectively from January 1, 2012, while the agreement’s other provisions became effective from January 1, 2013. According to the treaty, the UAE is the go-to jurisdiction for investment from the Middle East into Switzerland, and vice versa.
The best instance of the treaty in motion is the acquisition of Swiss company SR Technics — one of the world’s largest independent technical solutions providers for international airlines — by a consortium of UAE investors from Abu Dhabi and Dubai between 2006 and 2009.
At the time of the treaty being signed in 2011, Younis Haji Al Khouri, Undersecretary of Ministry of Finance said the agreement reflects the UAE’s efforts in supporting the free movement of factors of production, increasing investment opportunities, avoiding obstacles pertaining to mutual trade and investment activities and encouraging import and export between the two countries.
“The UAE has signed this agreement with Switzerland as part of its efforts to solidify joint financial and investment efforts with other countries and to enhance its local economy. Not only do these agreements play a positive role in enhancing global ties, but they also provide benefits for citizens, companies, sovereign wealth funds, private and public companies, residents, and national state-owned air carriers, which are exempt from all taxes,” Al Khouri was quoted as saying by WAM. ■
